Slide 1: KION Q3 Update Call 2013
KION Q3 UPDATE CALL 2013 Gordon Riske, CEO Thomas Toepfer, CFO Wiesbaden, 14 November 2013
Slide 2: Agenda
AGENDA 1 Highlights Q1-Q3 2013 Gordon Riske 2 Financial Update Thomas Toepfer 3 Outlook Gordon Riske 14 November 2013 | Q3 Update Call 2
Slide 3: Agenda
AGENDA 1 Highlights Q1-Q3 2013 Gordon Riske 2 Financial Update Thomas Toepfer 3 Outlook Gordon Riske 14 November 2013 | Q3 Update Call 3
Slide 4: Q1-Q3 2013: Financial Highlights
Q1-Q3 2013: FINANCIAL HIGHLIGHTS Solid business development in Q1-Q3 Order intake close to 2012 figure Revenue on high prior year level – €3,297m in Q1-Q3; slightly down by -2.6% – €3,317m in Q1-Q3; up 0.3% vs. 2012 – Q3 order intake of €1,046 m on prior year – Q3 down by 0.7%; growth in services le
Slide 5: Q1-Q3 2013: Operational Highlights
Q1-Q3 2013: OPERATIONAL HIGHLIGHTS Continuation of profitable growth strategy Global markets maintain pace – Western Europe still weak due to delayed customer demand – Successful price assertion for KION even in weaker than expected European market – KION achieved best quarterly orders in emerging m
Slide 6: Current Market Development
CURRENT MARKET DEVELOPMENT Global demand maintains pace, Western Europe still weak Global market is up by 7.5% in Q3 Global market Q1 12 – Q3 13 – Global orders YTD 5% above previous year Growth y-o-y (r.s.) – Positive momentum continues in Q3 Order intake in tsd units (l.s.) – Volume growth driven
Slide 7: KION Performance
KION PERFORMANCE Order activity moderately strengthens in Q3 Overall solid performance KION global orders – High level of almost 106,000 units (YTD) in thousands of units – Order intake in Q3 grows by 1.8% (yoy) – Improving trend continues 107 106 Slow recovery of Western European market – Only grad
Slide 8: Western Europe
WESTERN EUROPE KION with solid improvement better than market Market development KION performance & activities – Q3 develops slightly slower than Q2 – Overall performance in Q3 close to 2012 – Many customer investments still delayed level and better than market – Germany with decelerating decline –
Slide 9: Western Europe: Core markets show different development paths
WESTERN EUROPE Core markets show different development paths Market pre- and post crisis Uneven levels and stages of Indexed LTM order units (year end 2006=100) recovery in core markets 120 German market is weakening after exceeding pre-crisis level 100 Germany U.K. France and UK are stabilizing, bu
Slide 10: Eastern Europe
EASTERN EUROPE Solid gains of KION in line with growing market Market development KION performance & activities – Demand re-accelerates in Q3 after slower – Continued strong growth path with market Q2 development – Maintaining market leadership in Q3 after – Russia: still slightly above previous yea
Slide 11: Central and South America
CENTRAL AND SOUTH AMERICA KION stays ahead of volatile market development Market development KION performance & activities – Slowdown in Q3 after strong first half of – Highest regional level driven by strong the year performance in Brazil – Lower Q3 regional volume mainly as a – Regional developmen
Slide 12: China
CHINA Continuing growth for market and KION Market development KION performance & activities – More than half of the global market growth is – Strongest quarter ever with solid growth across coming from China all product categories – Rising government spending and corporate tax – High order level be
Slide 13: China: Further strengthening market position after 20 years
CHINA Further strengthening market position after 20 years Leading market position in China Replicating service business model Based on volume (2012) – Already over 25% share of service revenues • Installed base of ca. 90,000 trucks • More than 2,000 sales and service personnel • So far 22 additiona
Slide 14: Agenda
AGENDA 1 Highlights Q1-Q3 2013 Gordon Riske 2 Financial Update Thomas Toepfer 3 Outlook Gordon Riske 14 November 2013 | Q3 Update Call 14
Slide 15: Key Financials Q1-Q3
KEY FINANCIALS Q1-Q3 Solid topline with further improved profitability Order intake1 (€m) Revenues1 (€m) Adj. EBIT1,2 (€m) Net income and growth (%) and growth (%) and margin (%) and growth (%) -2.6% 8.8% 9.1% +0.3% +3.1% 3,386 3,297 3,308 3,317 292 301 >100% 81 35 Q1-Q3 2012 Q1-Q3 2013 Q1-Q3 2012 Q
Slide 16: Key Financials Q3
KEY FINANCIALS Q3 Solid topline with further improved profitability Order intake1 (€m) Revenues1 (€m) Adj. EBIT1,2 (€m) Net income and growth (%) and growth (%) and margin (%) and growth (%) 9.1% 9.3% -0.5% -0.7% 1,090 1,082 1,052 1,046 +0.8% +26.3% 100 101 9 11 Q3 2012 Q3 2013 Q3 2012 Q3 2013 Q3 20
Slide 17: Revenue Growth
REVENUE GROWTH Continued service growth Q1-Q3 2013: revenue by product categories Q3 2013: revenue by product categories (€m) +0.3% (€m) -0.7% Services Services -1.7% +3.0% -5.2% +5.4% 17 -33 12 14 -32 14 11 1 3,308 3,317 1,090 1,082 1 Q1-Q3 New After Rental Used & Q1-Q3 Q3 2012 New After Rental Use
Slide 18: Continuing Margin Expansion
CONTINUING MARGIN EXPANSION Strong profitability through price assertion & cost improvement Adjusted EBIT and margin1,2 Key drivers for improved profitability 8.8% 9.1% 9.1% 9.3% All main product segments show gross profit improvement due to increased margins 292 301 – Price discipline for new truck
Slide 19: Adjusted EBIT to Net Income Q1-Q3 2013
ADJUSTED EBIT TO NET INCOME Q1-Q3 2013 Significant increase of net income 1 € million Q1-Q3 2013 Q1-Q3 2012 Change – 2012 includes reversal of EBIT from Hydraulics Adjusted EBIT1,2 301 292 3.1% of €26m Non-recurring items -12 10 <-100% – 2013 includes IPO and minor restructuring costs KION acquisiti
Slide 20: Adjusted EBIT to Net Income Q3 2013
ADJUSTED EBIT TO NET INCOME Q3 2013 Q3 financial result impacted by IPO-related one-offs € million Q3 2013 Q3 2012 Change – 2012 includes reversal of EBIT from Hydraulics Adjusted EBIT1,2 101 100 0.8% of €6m Non-recurring items -5 -11 56.7% – 2013 includes IPO and minor restructuring costs KION acqu
Slide 21: Cash Flow Performance
CASH FLOW PERFORMANCE Free cash flow in Q1-Q3 above prior year Q1-Q3 Q1-Q3 – 2012 incl. ca. €39m of Hydraulics EBITDA € million Change 2013 2012 – Total TWC: €640m; negative flow comparable EBITDA (excl. FS segment) 467 487 -4.0% to prior year Change of trade working capital -124 -123 -0.6% – Regula
Slide 22: Improved Capital Structure
IMPROVED CAPITAL STRUCTURE Deleveraging from IPO [€m] Net financial leverage 2,607 reduced to 1.5x1 following IPO 392 Further deleveraging from 1 513 1,958 2.7x1 operations 387 One-offs of €82m 1,702 -702 – IPO and refinancing 514 – Acquisition of dealers in -52 27 82 France and Turkey 1.5x1 1,000 1
Slide 23: Focus on Margin Improvement
FOCUS ON MARGIN IMPROVEMENT Measures in place to drive profitability EBIT Margins 2012 – Peer Comparison (in %) Margin uplift 2013 and beyond 25% Margin differentiators: – Scale and synergy benefits of 20% KION vs. competitors – Local sourcing and production in 15% KION with best in class Emerging M
Slide 24: Agenda
AGENDA 1 Highlights Q1-Q3 2013 Gordon Riske 2 Financial Update Thomas Toepfer 3 Outlook Gordon Riske 14 November 2013 | Q3 Update Call 24
Slide 25: Outlook
OUTLOOK Confirming our previous earnings outlook Economic growth in 2013 slightly below prior year level – Slower recovery in Western Europe – Reduced growth rates for emerging markets although still attractive growth opportunities Slight recovery of global forklift truck demand in 2013 vs. 2012 aft
Slide 26: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Attractive market with growth profile above GDP 2 Global leader – strong home base and well positioned in growth markets 3 Technology leadership drives premium positioning and customer value 4 Robust integrated business model with high contribution from services 5 Profitabili
Slide 27: We Keep the World Moving
WE KEEP THE WORLD MOVING 14 November 2013 | Q3 Update Call 27
Slide 28: Disclaimer
DISCLAIMER This document has been prepared by KION GROUP AG (the “Company”) solely for informational purposes. For the purposes of this notice, the presentation that follows shall mean and include the slides that follow, the oral presentation of the slides by the Company or any person on behalf of t